Microsoft had created Open XML – a open format for Microsoft Office documents – instead of adopting the existing and widely known ODF. ODF has already been approved as an international standard by the ISO. Existence of two open standards to serve the same purpose for office documents dilutes significance of standards itself.
Microsoft and Novell, following up on their deal, are now going to provide open source bidirectional translators for better interoperability between Microsoft Office 2007 and OpenOffice. There has been some negative backlash, but mainly because of the negative bias towards Novell because of the deal. Miguel de Icaza clarifies some things and I think anyone is open to working with OpenOffice without harming its functionalities.
The important point to consider is not the action itself, but its merit. Would it be better if Microsoft Office could comply with ODF, since many other office suites have done so! If there is more technical merit with OpenXML than ODF, lets revise ODF and bring it at par. One, it will reduce the effort for inteoperability and second it will probably save a divide in the community. It will also probably save some headache for ODF users in future. David Wheeler gives a good explanation why some governments have already switched to ODF, which also involves some legalities. I think Microsoft should be discouraged from creating duplicate standards and encouraged to adopt the existing ones, or enhance them. The only reason I can see is probably licensing issues. But since Microsoft has already crashed into the open source party, the licensing issues can be sorted out. I think this is much better than bidirectional translators.
UPDATE: Open XML formats are getting more incompatible. Please justify why not ODF! Paul asks the same question.

December 8th, 2006 at 3:16 pm
[...] There does not seem to be much opposition to existence of two standards for the same purpose. Only IBM did. Frankly, I see Microsoft coming up with Open XML because a lot of bodies, including government agencies, were switching to the ODF. Is there an answer to the question why Microsoft did not adopt ODF, or develop it further if it was found lacking? So yeah, now I can claim to comply to an open standard but still cannot guarantee interoperability, because someone else might comply to the other open standard! Is there any thought being given to the benefit to the end user out of these certifications? Or standards just for the sake of standards or for the sake of businesses? Either we need to answer these questions or start living with double standards! [...]
February 2nd, 2007 at 5:41 pm
[...] for translating documents from Open XML to ODF formats. This was one of the things that had come up when Open XML was standardized. The OpenXML Translator, which is an add-in for Microsoft Word 2007, will provide options for [...]
August 1st, 2007 at 6:11 pm
[...] Fletcher gives his choice for ODF icons. There are more examples from which you can choose. I support ODF because it is the open standard that focused on interoperability and freedom from tools and [...]